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Building boom transforms heart of Beirut (ZEINA KARA, 01/22/10, AP)

Beirut’s building craze, despite chronic political turmoil in recent years, has astonished even the experts, turning Lebanon into an investment haven at a time when other regions — including the oil-rich Persian Gulf — are hemorrhaging cash. Even the seemingly unstoppable city-state of Dubai has hit the brakes after a massive debt crunch there rattled world financial markets.

“The market is continuing to really stun a lot of people and to attract some new players,” said Raja Makarem, founder of Ramco, a leading real estate company. He added that Lebanon has seen a 30 percent increase in property value for each of the past four years.

Lebanon has seen a window of relative peace since the devastating Israel-Hezbollah war in 2006 and deadly gunbattles two years later between Hezbollah and its political rivals in the streets of Beirut. Since then, political wrangling has continued, but Lebanon’s many factions have managed to keep their differences from exploding into violence.

Moreover, the financial meltdown that hit Dubai and elsewhere may have even helped Lebanon. While real estate buyers in Dubai were mostly investors and speculators depending on bank loans, the demand in Beirut is mainly from end users buying with cash, Mukaram and other experts said.

Real estate isn’t the only sector booming: Tourists have rediscovered the coastal nation with its beaches, scenic mountains and freewheeling lifestyle. This week officials announced that Lebanon attracted a record 1.8 million foreign visitors in 2009, earning an estimated $7 billion, beating the previous record of 1.4 million tourists in 1974 — just before the 1975-1990 civil war broke out.

For many, especially those who have not visited Beirut in a while, the transformation from the real estate frenzy is striking.